Nationwide set to pay loyalty bonus to members again

There is now a new version of this article: Nationwide to pay £100 bonus to customers again

Nationwide is set to pay a loyalty bonus to millions of customers this year.

Last June, the building society handed out £100 bonus payments under its Fairer Share scheme. 

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It gave 3.4 million eligible members a share of its profits, paying £100 straight into their Nationwide bank accounts.

As a building society, Nationwide is owned by its customers, known as members, so it can use its profits to benefit its members rather than shareholders.

This could mean better rates on savings, mortgages and other products. It has previously launched a chart-topping 8% regular saver account (it now pays 6.5%), paid a £200 switching bonus, and unveiled a 5% easy-access account for 11 to 17-year-olds. 

Last May, Nationwide announced it would give £100 bonus payments to certain customers following a strong set of financial results and profits of £2.2 billion.

And now it looks like it could repeat the exercise again this year - we explain what could be announced, and who might get the payment.

When will we know if Nationwide is making a Fairer Share Payment?

The building society says it is “hoping that we can make a payment in 2024”. 

It adds: “It depends on how we perform financially. We will be able to confirm the payment, as well as the eligibility criteria, after the financial year ends in April. Look out for an announcement on 23 May.”

Nationwide’s Fairer Share payments are subject to both its financial strength, and board approval. Nationwide’s full-year financial results will be announced this Thursday, 23 May.

Anna Bowes, co-founder of the savings website SavingsChampion.co.uk, tells MoneyWeek that it would be great to see “Nationwide rolling out a loyalty bonus scheme again”. She likened the thrill of an unexpected cash bonus to winning on NS&I’s Premium Bonds. 

Nationwide's financial results and details of its Fairer Share scheme will come a day after Virgin Money shareholders decide on whether to accept a £2.9 billion takeover offer from the building society.

If it goes ahead, the takeover, announced in March, will create one of the UK's largest mortgage and savings groups.

How much will the bonus payment be worth?

Last year, Nationwide paid out £100 bonuses. This time, it could be the same or a different amount. 

It’s possible the payout could be higher as it’s expected that the building society’s profits will have been buoyed by higher interest rates.

Nationwide’s financial results, and the amount of any Fairer Share payments, will be revealed this Thursday.

Who will qualify for the payment?

Customers needed a current account plus a savings account or mortgage with Nationwide to qualify for the payment last year.

The current account must have been open on 31 March 2023, and at least £100 held in a Nationwide savings account or cash ISA or £100 owing on a residential mortgage. 

The criteria could be the same again this year, or it could be made more generous so that more members qualify for the bonus.

Last year, the building society was criticised for not making payments to all members. For example, if you only had a current account with Nationwide, and even if it was your main account that you used regularly, you didn’t get the £100 bonus if you didn’t also have a savings account or mortgage.

Likewise, if you had a large balance in a savings account with Nationwide, and had been a customer for many years, if you didn’t also have a current account with the building society, you wouldn’t have qualified either.

Bowes argues that depending on the criteria for getting the bonus this year, members who don’t qualify “may simply prefer to see the interest rates paid to them increased across the board” rather than profits being used on the Fairer Share scheme.

When will the bonus be paid?

It is likely to be similar to last year, with the bonus payment announced in May and paid in June. 

Last year Nationwide alerted eligible members about the payments either with a message when they logged on to their online banking or via email or letter.

The £100 payment was automatically paid to Nationwide current accounts between 13th and 30th of June. There was no need to apply for the payment, or to provide bank details in order to accept the cash bonus.

Does Nationwide offer good savings rates?

 A free cash bonus is a nice perk for being a loyal customer, but how do Nationwide’s savings rates compare against the wider market?

Its 6.5% regular savings account stacks up well; it is only beaten by The Co-op Bank, First Direct and Skipton, which offer 7%.

According to Bowes, compared to the high-street banks, Nationwide offers more competitive easy-access rates to savers.

For example, for someone with a £10,000 balance, Nationwide’s Instant Access Saver pays 2.3%. In comparison, NatWest, Barclays, Santander, HSBC and Lloyds pay interest ranging from 1.4% to 2% on their easy-access savings accounts.

Source: Savings Champion. Information correct as of 20/05/2024. Rates based on a balance of £10,000 as some of the accounts are tiered.

However, you can get better rates than those offered by Nationwide if you look beyond the big savings providers. “You can earn 5.02% with Oxbury Bank’s Easy Access Account Limited Edition 1 (minimum deposit is £20,000 though), but those with less can still earn far more – Kent Reliance’s Easy Access savings account Issue 70 pays 4.96% AER on balances of £1,000 plus,” notes Bowes.

Analysis by Moneyfactscompare.co.uk for MoneyWeek reveals that Nationwide’s savings accounts, including fixed bonds and ISAs (but excluding its 6.5% regular saver), “all sit in the middle quartiles of the market at present: meaning there are a considerable number of products available that offer better returns to customers”.

James Hyde at Moneyfactscompare.co.uk comments: “It is always beneficial for consumers to consider all options available to them, and be willing to switch if their loyalty is not being adequately rewarded.”

Bowes adds: “For many savers, they feel more confident with a provider they are familiar with, but as long as they are protected by the Financial Services Compensation Scheme (FSCS) there is no need to deny themselves some extra interest with someone they may not have heard of.”